The UAE is contemplating new rules to bring the federation's anti-money laundering legislation in line with revised standards issued by the Financial Action Task Force (FATF).

As part of its existing legislation, the UAE already monitors letter of credit (L/C) openings.

Revisions

The FATF's International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation were revised in 2012 to strengthen global safeguards and provide governments with stronger tools to take action against financial crime.

New rules to comply with these standards are now being discussed in the UAE by the Federal National Council's financial committee.

As a result of these discussions, the UAE is expected to introduce rules to provide protection to witnesses who testify against suspected criminals involved in terrorism, money laundering, trafficking in drugs and humans or large scale fraud cases.

L/C implications

The UAE Central Bank already requires that banks and financial entities report any transactions carried out by customers, which they suspect may be related to illegal dealings, and may consequently be related to money laundering or financing of terrorism.

Since banks and financial entities already have to record L/C openings, it may be that more suspected illegal dealings involving L/Cs may be revealed.

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